Aligning With Metrics: Differential Impact of IT and Organizational Metrics on Cognitive Coordination in Top Management Teams

Abstract

Achieving cognitive coordination in cross-functional teams is a perennial challenge in organizations. It is especially challenging in the context of information systems, where strategic alignment remains a top concern of leaders despite decades of research on the topic. In this study, we develop and empirically validate a theoretical model that explores the role of communicating about performance metrics in fostering cognitive coordination between the Chief Information Officer (CIO) and top management team (TMT). Building on a theoretical lens of transactive memory systems, we hypothesize how the use of unit-specific metrics of information technology (IT) performance and collective metrics of organizational performance can differentially influence mutual trust and shared understanding in the CIO–TMT relationship. Through a survey of 268 CIOs, an experiment with 106 participants using a novel IT leadership game, and an algorithmic analysis of 3200+ articles in a trade publication, we find that communications using narrowly focused IT unit metrics improve mutual trust between the CIO and the TMT, while communications using broader organizational metrics (along with mutual trust) increase shared understanding of IT's role in improving organizational performance. Our multimethod study adds an important new facet to the rich literature on IT strategic alignment as well as the use of performance metrics in operations management. We discuss its implications for both theory and practice in improving cognitive coordination among the CIOs and TMT. Our model and findings are also relevant to other cross-functional teams where specialized individuals must collaborate to achieve collective goals.